World War II -- Brought to You by Nestlé's Candy

The Swiss didn't just hang on to Holocaust victims' bank accounts. They used them to bankroll Hitler's war machine.


The next time you're hungry for a Nestlé's Crunch or a box of Quik, consider this: In 1933, the same year that Adolph Hitler rose to power in Germany, the food giant was helping to finance the creation of a Nazi Party in its native Switzerland. It was a political investment that paid off handsomely. During World War II, Nestlé won the contract to supply the entire Germany army with chocolate -- a deal worth hundreds of millions of dollars.

While much of the media's attention continues to be focused on what Swiss banks did with Holocaust victims' money, the supposedly neutral country's complicity with the Nazi war effort ran much deeper. In effect, the land of the cuckoo clock essentially acted as Hitler's banker, taking in all the gold that the Nazis looted from the treasuries of Europe and exchanging it for the hard currency that kept Germany's war machine running.

As we now know, some of that gold was taken from the homes and teeth of Jewish victims whose relatives are still alive today. Jewish groups, backed by the United States, are demanding an accounting of the gold so that these relatives and a diminishing number of survivors can be compensated.

Also at issue is how Swiss banks handled the accounts of Jews who hid their money in Switzerland -- they thought for safekeeping -- as storm clouds gathered over Europe in the 1930s. For the past 50 years, relatives and a few survivors have tried to reclaim their assets, but their efforts have been stymied by Swiss banks. Some bank officials demanded official death certificates, as if Auschwitz and Bergen-Belsen maintained such documents. In one instance, a bank was discovered shredding wartime records that likely contained the details of unclaimed Jewish accounts.

Until recently, Swiss banks claimed to have located dormant accounts worth only some $27 million. Now, after more than two years of entreaties by Jewish groups and the U.S. Congress, Swiss banks earlier this week finally published a list of more than 2,000 dormant accounts worth $42 million. But in many respects, the list raises even more questions than it answers. Why would it have taken so long for the banks to track down account holders, many of whose names can be found in Swiss and German phone books? And how, for example, did the name of the former head of the Nazi puppet state of Slovakia wind up on the list? Or a former aide to Adolf Eichmann or a deputy commandant of a Nazi concentration camp?

It is also worth asking why the Swiss are now seeming as if they are trying to come clean on the issue of the dormant accounts. One answer is that a team of independent auditors, headed by former Federal Reserve Chairman Paul Volcker, is about to pore over Swiss Bank records. The audit is part of a larger international effort to resolve not only the outstanding claims of Holocaust survivors against Switzerland but also to probe and publish the truth about Switzerland's wartime role. An international team of historians and scholars is set to begin its investigation before the end of the year.

If the documents that I encountered as co-author of a documentary ("Blood Money: Switzerland's Nazi Gold," to be broadcast on A&E this Saturday at 9 p.m. EDT, 10 p.m. PDT) are any indication, these historians will find a wealth of materials that will shatter Switzerland's wartime image as an oasis of neutrality and humanitarianism amid a sea of war and savagery.

Our researchers uncovered Allied intelligence documents that describe how, in addition to chocolate, Swiss factories also sold Nazi Germany weapons and weapons parts, munitions, optical equipment, timers, machinery and electrical power, all of which kept the German army on the march -- and Switzerland's wartime economy thriving. President Franklin Roosevelt was so angry about Switzerland's complicity with the Nazis that in 1942 U.S. warplanes bombed a Swiss ball bearing factory at Schaffhausen on the Swiss-German border. Officially, the bombing was described as a mistake. But the documents show the allies were trying to send the Swiss a message.

Such messages did little to dissuade the Swiss. To this day, Berne still argues that it was surrounded by Germany and Nazi-occupied countries and therefore had little choice but to deal with Hitler during the war. Really? Then why, as our research revealed, did the Swiss continue to do business with Berlin even as the Nazi regime was in retreat? In addition to its factories continuing to produce war materiel for the Germans, the Swiss allowed German troop trains to traverse the country en route to Italy. Most important, it continued to buy looted gold long after the other neutrals -- Sweden, Spain and Portugal -- acceded to Allied demands to halt their purchases in 1943.

Switzerland served as the clearinghouse for stolen Nazi art. Swiss art dealers made a fortune selling the impressionist and abstract painting that the Nazis considered "degenerate." Switzerland also benefited handsomely from the Nazi conquest and looting of Belgium, a major diamond industry center. By the middle of the war, Switzerland had replaced Antwerp as one of the diamond capitals of the world.

Another little-know fact that we discovered was how Switzerland allowed the International Committee for the Red Cross -- the best-known symbol of Swiss neutrality and good deeds -- to be infiltrated and corrupted by Nazi agents. U.S. intelligence documents describe how the Nazis used the Red Cross to smuggle money into Turkey and the Balkans and to plant Nazi agents among Free French refugees in North Africa.

Even the end of the war in 1945 didn't stop the Swiss from cashing in on their Nazi connections. As the Allies scrambled to recapture millions of dollars worth of stolen Nazi treasure, the Swiss continued to fill their pockets by helping fugitive Nazis flee to South America, along with untold fortunes in loot, in what U.S. intelligence described as "the largest transfer of wealth in history."

For a brief time after the war, the Allies tried to force Switzerland to return the Nazi gold to its rightful owners. At first the Swiss denied it dealt with any stolen gold -- a claim the Allies quickly disproved by producing records of Belgian gold found in Portugal and shipped through Switzerland. Then the Swiss, playing for time and falling back on their neutrality, refused to recognize the Allies' authority over this matter. Their ploy worked. The Allies, now more concerned about rebuilding war-ravaged Europe and blunting the threat of communism, agreed to let the Swiss pay back only $58 million out of an estimated $250 million in the looted gold it had taken in. Officially, the payment was described as a humanitarian contribution to the reconstruction of Europe. Even then, the Swiss didn't come through, eventually paying out only half the agreed amount.

With the commission of scholars about to begin its probe, the Swiss appear headed for a painful confrontation with themselves. But an anti-American and anti-Semitic backlash is gathering steam in Switzerland, with right-wing politicians campaigning against more payments to Holocaust victims. If the right wingers win, what could have been a welcome reckoning with history will be one more exercise in Swiss denial.
July 25, 1997

Jonathan Broder, Salon's Washington correspondent, co-wrote "Blood Money: Switzerland's Nazi Gold," an investigative report to be broadcast on A&E this Saturday at 9 p.m. EDT, 10 p.m. PDT.